Cargill third quarter earnings down 28 percent
Company blames external events for decline
Cargill reported net earnings of $319 million in the fiscal2014 third quarter ended Feb. 28, down 28 percent from $445 million in theyear-ago period. Nine-month earnings were $1.45 billion, down 21 percent from$1.83 billion a year ago. Third-quarter revenues were $32 billion, essentiallyeven with the year-ago period; nine-month revenues totaled $98.7 billion.
“External events affected our quarterly results, even as we saw operational improvements in key businesses,” said David MacLennan, Cargill’s president and CEO. “Our animal protein results are much improved from last year, and, with 2012’s acquisition of Provimi, our global animal nutrition operations are on a record pace for the year. Despite one of the worst winters on record, we reliably delivered a near-record tonnage of road salt and de-icing products to our customers across North America’s snow belt.”
MacLennan said the company’s earnings were trimmed by a trading loss related to an unprecedented price spike in U.S. power markets in late January, part of which has been recovered; the rejection of certain U.S. corn shipments to China; and weather-related disruptions to railway service in North America.
Among Cargill’s four business segments, third-quarter earnings rose considerably in animal nutrition and protein compared with the same period a year ago. Within the segment, global animal nutrition results were boosted by improved volumes and an effective sales mix. Animal protein results were lifted by increased operating efficiencies and by exports in U.S. and Australian beef. Earnings strengthened in industrial and financial services. Mixed but overall weaker results in energy and metals were offset by good performance in asset management and ocean transportation.
Food ingredients and applications earnings were solid, though moderately below last year’s third-quarter performance, a period that included one-time gains from a trade-related claim and the sale of a cultures and enzymes business. Current results were tempered by lackluster consumer demand and by additional costs from recent acquisitions and new or expanding facilities in several countries. Origination and processing finished the quarter below the year-ago level, with earnings decreased by costs related to China corn trade and, in general, limited opportunities in grain trading and storage.